The FCC has begun the long process of evaluating whether AT&T's intended purchase of T-Mobile would serve "the public interest, convenience and necessity."
Federal regulators are kicking off what
is expected to be a yearlong review of AT&T's $39 billion bid to buy
T-Mobile, a deal that would create by far the largest wireless carrier in the
The Federal Communications Commission
on April 14 released a Public Notice announcing the opening of a docket on the
matter, and in a conference call with the media, outlined how it intends to
handle the high-profile matter. As part of the telephone briefing, reporters
agreed not to quote any of the speakers by name.
Ultimately, the question the commission
needs to answer, in all of these proceedings, is, "Would granting the
requested approval to transfer control of T-Mobile's Commission-issued licenses
serve the public interest, convenience and necessity?" said one
commissioner. "The applicants, AT&T/T-Mobile, will have the burden of
proof-the obligation to persuade us that the public interest test is
The commissioners said they expect
AT&T and T-Mobile later this month to file applications asking for the FCC
to OK the transfer of control of T-Mobile to AT&T. The commission will
review the file, make sure everything is in order and then put out a statement
a week later.
As a procedural matter, the
commissioners said the case will be governed by "permit-but-disclose ex
parte procedures." Essentially, should one side make a presentation after
the applications are filed, they must summarize the presentation and file it
electronically, so that the FCC can release a public notice saying that it's
In a pleasingly
your-book-report-cannot-have-five-inch-margins way, the FCC even went into a
bit of detail about what constitutes the summarizing of a meeting, saying that
one- or two-sentence descriptions, or just listing the subjects discussed,
won't cut it.
Eventually, the FCC will decide whether
the deal will get its go-ahead first by determining whether it would comply
with specific requirements in the Communications Act and any other applicable
statutes. Assuming the answer is yes, the commissioners will move on to the
broader public interest evaluation. The commission precedent, regarding the
public interest inquiry, is that it encompasses the broad aims of the
Communications Act, a commissioner said.
"It includes, but isn't limited
to, a competition analysis. We ask whether the transaction would enhance or
preserve competition that exists today, or would it limit that competition.
That is, to some extent, an inquiry that overlaps with the antitrust
authorities," he said. "But it also goes beyond that antitrust
inquiry, and we can and do consider more broadly the effect of the transaction
on future competition and we take a broader view than the antitrust agencies in
looking at competition issues."
At the end of the day, he concluded,
the commission's job under the public interest test is to "balance any
potential harms that we identify in the transaction against the potential
benefits ... and to find whether the applicants have carried their burden of
establishing that it would be consistent with the public interest to transfer
control of the licenses."
Potential benefits for whom weren't
exactly clear. Should the deal be approved, it's estimated that AT&T and
Verizon would have a "duopoly," controlling approximately 70 percent
of the wireless market. Sprint is currently the nation's third-largest carrier
and would keep that distinction should the deal go through-though it would be majorly
dwarfed by the top two players.
In a March 28 statement, Sprint
announced that it plans to fight the acquisition
, which it
believes "would reverse nearly three decades of actions by the U.S.
government and the courts that modernized and opened U.S. communications
markets to competition."
During a question-and-answer portion of
the FCC conference call, little more was cleared up, with moments of silence
often greeting questions and requests for details about how exactly competitiveness
and competition in the industry would be measured.
At one point, a commissioner likened
the review process to how some people describe their relationships on Facebook: